The Student Loans Company is continuing to process FE loans for apprenticeships while it awaits government orders that the system has been “dropped”.

A loans company spokesperson said today, as new figures showed just 569 apprenticeship loan applications were made in nine months, the system was still operating despite Business Secretary Vince Cable exclusively telling FE Week it was being dropped.

He “accepted” the system had failed, but said non-apprentice FE loans would remain.

He said: “The advanced learning loans system has taken off for non-apprenticeships, but for apprenticeships we accept it has not succeeded and we’re dropping it.

“Regulations have to be put through Parliament to conclude it [apprenticeship loans system], but we’ve accepted it didn’t work and there’s no shame in that, but it will continue with the non-apprenticeship learners.”

It came the day before figures from the Department for Business, Innovation and Skills showed apprentice FE loans’ poor uptake had continued through November.

From the system’s launch up to the end of October, just 404 apprenticeship FE loans had been applied for — less than 1 per cent of the 52,468 total number of 24+ advanced learning loan applications, which includes A-levels and access to higher education, among others.

And that proportion showed little change taking into account November’s apprenticeship loan applications, which took the figure up to 569 (1 per cent).

FE loan applications up to December 2013

It appeared well off target for the government forecasts of 25,000 applications for apprenticeship loans this academic year (by July 31, 2014).

An official announcement on the end of the apprenticeship FE loans system had been expected in the annual skills funding statement which has been delayed until, FE Week understands, the New Year.

Nevertheless, Skills Minister Matthew Hancock said: “While the newly available loans for FE have seen higher than expected demand, loans for apprenticeships have not seen high demand.

“With the confirmation of a new funding system for apprenticeships in the Autumn Statement, now is the right time to reinstate co-funding for all apprenticeships ahead of more fundamental reforms, details of which will be publicised in the new year.”

The slow uptake has long-prompted concerns from the likes of the National Institute of Adult Continuing Education (Niace) whose chief executive, David Hughes, said: “Today’s figures confirm our belief that loans for apprenticeships is a ‘failed’ policy.”

He added: “We would like to congratulate the government for recognising this and accepting that they need to act, and to act swiftly.

“We are, of course, anxious to see the detail of the new proposals. Whatever is proposed, we are sure that the government, employers, learning providers and learners and their representatives will need to work together to understand the full implications of this policy and how best to take it forward.

“Apprenticeships for adults are essential for a successful economy as well as for allowing better social mobility in our society.

“We are particularly keen on putting forward the learner-perspective as part of the new policy. This is particularly important in an employer-led system.

“I would like to see an Apprentices’ Charter which will provide apprentices with an understanding of what they should expect from their apprenticeship.

“This would help enshrine the commitment that apprentices will always be supported to learn for their career, not just for the job they are in today.

“We are worried that the public funding cuts required over the next three to four years may result in loans being the only funding mechanism for adults at intermediate as well as lower levels of learning.

“We hope that any consideration of introducing loans for other age groups and other levels of learning in the future will now be postponed.”